Cardinal O'Malley's Letter FY06 Cardinal O'Malley's Letter from Annual Report Fiscal Year 2006

My Dear Friends in Christ,

Last April, in keeping with our commitment to financial transparency, the Archdiocese of Boston released comprehensive reports that provided a detailed summary of our operations and the financial position of our funds. These reports were made available to any and all interested parties. The reports were an important step as we sought to go forward with the mission of the Church and to witness the Gospel in word and deed, both within our Catholic family and to the wider community.

As significant as last year’s financial reports were for the Archdiocese, their release was just the beginning of our commitment to provide this information on an annual basis. We continue to honor that commitment as we now release the reports for 2006. It has been our goal this year to improve the presentation and accessibility of the information, and we will continue to strive for excellence and clarity with each successive release. Our efforts to rebuild trust and confidence will allow nothing less.

The process of rebuilding in our Archdiocese, the priority I shared with you in July of 2003 as I was installed as your Archbishop, also calls for vision and planning. We have also been blessed with the talents and efforts of new personnel in several key positions. Very Reverend Richard Erikson, Vicar General, Jim McDonough, Chancellor, Scot Landry, Director of Institutional Advancement and Teresa McGonagle, Director of Finance have brought a faithful commitment to the good of the Church, a fresh perspective, and the kind of leadership that allows the women and men they work with to take new initiatives and to succeed. There continue to be many challenges before us, but it is clear that many people want to help and are doing so. We thank God for the deeply held faith of the people of this Archdiocese and the dedication that is evidenced day in and day out at the parishes, schools, hospitals and social service agencies. It is also important that we never fail to invite those who have stepped away from active participation in the life of the Church. Recent years have not been easy for Catholics and many others in the Archdiocese. We must always present kindness and a genuine welcome to our sisters and brothers who have been absent from our midst. The Christian bond forged in Baptism is never broken and now is the time to draw on its strength, to be reunited in the name of the Lord.

As the Archdiocese charts a course for the future we must, and we will, continue to work to earn the respect and trust of those whom we serve, the Catholic population and society at large. In Christ’s name, that is my pledge to you.

Devotedly yours in Christ, +Cardinal Seán P. O’Malley, OFM Cap Archbishop of Boston

Fr. Richard Erikson's Letter FY06 Fr. Richard Erikson's Letter from Annual Report Fiscal Year 2006

Greetings, In the Archdiocese of Boston, we have the extraordinary privilege of worshipping Jesus Christ as a family of nearly 2 million Catholics, in 295 parishes, across 144 communities. We are educating and passing on the faith to nearly 50,000 students each year in our Catholic schools and 156,000 children in our religious education classes. We continue the healing ministry of Christ for more than one million patients annually in our hospitals and continue the Lord’s care for those most in need for 200,000 individuals through our social service outreach. Mass is celebrated in close to twenty languages each week. We are a very blessed and diverse body of Christ.

“To those whom much is given, much is expected.” Those of us who work and minister in the administration of the Archdiocese are committed to service to our parishes, schools, social service agencies, hospitals and cemeteries. Over the past year we have redoubled our efforts at service on behalf of all who call the Archdiocese of Boston home. The attached Annual Report gives an account of our stewardship of the generous resources we have been given for the care of God’s people. At the heart of the Archdiocese of Boston is the strength and life of our parishes and much of our energy and resources are devoted to parish life.

We established the Office of Regional Services, led by Sister Marian Batho, CSJ , to bring services closer to parishes by helping them find the resources they need, both inside and outside the chancery. The office connects a parish with the appropriate professionals at the chancery who can help meet the parish’s particular need. We have a dedicated and professional staff ready to provide assistance in pastoral care, planning, finance, risk management, technology services, real estate and cultural diversity, to name a few areas of expertise. We are also creating programs for staff development and providing opportunities for parishes to share best practices with one another.

Last December, we installed two new Auxiliary Bishops to help us better serve our clergy and parishes. Considered by all to be respected pastors within our own Archdiocese, we are blessed that Bishop John A. Dooher (South Region) and Bishop Robert F. Hennessey (Central Region) have now joined Bishop Emilio S. Allué (Merrimack Region), Bishop Francis X. Irwin, (North Region) and Bishop Walter James Edyvean (West Region) in helping Cardinal Seán minister to the faithful. Working in concert with Sr. Marian, we envision a more efficient, responsive effort in meeting the pastoral needs of the Archdiocese. We give thanks and offer our continued blessings for a lifetime of achievement and service to the Catholic faithful by retired Bishop John P. Boles, D.Ed., D.D.

An important part of our ministry has been to enhance communication. This past year we completed the transition from the postal service and faxes to emails and Internet as our primary means of communication. We reach thousands of individuals instantly now through the use of email. We also created an intranet site designed specifically to allow clergy, religious and parish staffs to get information quickly and in a user friendly way. We are saving tens of thousands of dollars through this effort, all the while providing instant communications to a growing number of clergy, religious and lay leaders in the Archdiocese.

This past year, Cardinal Seán launched his blog, cardinalseansblog.org. His regular posts allow him to communicate directly with Catholics of all ages. He also is now podcasting, recording video messages that can be downloaded from iCatholic.com, courtesy of the Archdiocese’s own Catholic TV. The Archdiocesan newspaper, The Pilot, launched a new and exciting website www.thebostonpilot.com and provides up to the minute news and Catholic perspective.

These are just a few examples of the many ways we are making every effort to be good and faithful stewards of the resources that have been entrusted to our care. I keep in my view three questions to help me assess how we are furthering the ministry of Christ in the Archdiocese of Boston. These questions serve to keep me grounded in what is most important in the ministry I have been called to by Cardinal Seán:

Am I giving Glory and Honor to God? Am I serving Christ and His Church? Am I honoring and respecting those I serve and those with whom I serve?

We are grateful to our many benefactors for providing us with the resources we need to continue the ministry of Christ in a way that exudes glory, honor, respect and service.

Very Reverend Richard M. Erikson, Ph.D. Vicar General and Moderator of the Curia

James P. McDonough's Letter FY06 James P. McDonough's Letter from Annual Report Fiscal Year 2006

To the Catholics of the Archdiocese of Boston,

We are pleased to provide you the Annual Report of the Archdiocese of Boston for fiscal year 2006. The financial state of our local Church is improving every day. In 2006, Cardinal Seán stated that “Together— clergy, religious and laity—we will find the way forward.” Since then he has encouraged chancery staff and the many dedicated lay volunteers and experts who advise us to always think in terms of service. In response to that charge, we have worked over the past twelve months to focus on serving parishes, schools, hospitals and cemeteries.

During this time we have made organizational changes to move the operations of the Archdiocese closer to the parishes, laity and clergy. It is our goal to become a center of service that supports our pastors and parishes, our principals and schools, and those who maintain our cemeteries. To do this, we have streamlined our operations by creating a new Parish and School Services group designed to bring essential services together in one place. Now parishes can turn to this group for help with issues related to insurance, employee benefits, technology, real estate and facility maintenance.

Parishes make up the core of our faith communities. It is in our local parishes that we worship, educate our children in the faith and work for peace and social justice in our broader communities. Through our parishes we are baptized, receive the Eucharist for the first time, enter the vocation of marriage, bring the sacraments to the sick and say our final farewells to loved ones.

In order to be there for us at all the stages of our spiritual lives, our parishes must manage a wide variety of tasks, from developing a financial plan to maintaining facilities to evaluating real estate opportunities. There was a time when a community of priests would manage each parish, sharing the workload and providing support to one another. That time has passed. Today, most often we rely on individual pastors to create a viable parish life with little or no additional clergy support. These men are doing the real work of God and it is our obligation to do all that we can to support them in these changing and challenging times.

The Archdiocese has responsibilities toward a number of Catholic institutions referred to as Related Organizations. These are Catholic institutions to which we provide moral and ethical guidance as well as other services as needed. For instance, the Central High Schools are among such entities that are included in our risk management, health insurance, pension fund, life insurance and disability insurance plans. Many of these institutions have small numbers of employees. Their participation in Archdiocesan plans makes them part of a larger group, which allows them to get better service, guidance, coverage and rates. As we make financial decisions that affect our work as Church, we do not forget that we are part of a broader community. This is particularly relevant when we sell property. Certainly we have an obligation to obtain a strong financial return for the parish, but we strive to do so while at the same time benefiting our neighbors. Examples of where we have achieved this balance include the sales of St. Joseph Parish in Salem, where the property is being developed into affordable housing and at Immaculate Conception Parish in Cambridge, which has been bought by the charter school that had been leasing part of the Church’s property.

Over the past year we have begun to see some improvement in our financial condition, but we are far from where we need to be as a Church. As you will see from this annual report we have been able to lower our operating loss in central operations by $2 million (or roughly 25%), increase our net assets due largely to the sale of Reconfiguration property, and significantly reduce the deficit in the Revolving Loan Fund. To the average person it might appear that the Archdiocese has substantial cash. The fact is that while corporation sole continues to show growth in overall revenue, the majority of that cash is for the specific use of particular parishes and schools. In other words, we are restricted in how we use the cash that is shown on the balance sheet.

One area that we are clearly focused on is our pension plans. The condition of the Lay Pension Plan has improved to the point of being nearly fully funded. With regards to the Clergy Retirement/Disability Trust (funded through the Clergy Benefit Trust and investments), we are making significant strides to strengthen these funds in order that our clergy receive the care they deserve after giving their lives to the mission of the Church. In this report, we address the steps currently underway to build up the Clergy Retirement/Disability Trust.

Our thanks to all who assist Cardinal Seán and his leadership team. Many laypersons as well as Clergy serve faithfully on several important committees that offer significant support and expertise to our financial management team, including:

 Finance Council – a group of lay leaders with business and financial acumen who advise the Cardinal and, as required by canon law, make decisions on major real estate transactions and other financial decisions. The Council has four subcommittees including Audit, Real Estate, Legal and Development.  Investment Council – a group of investment professionals who advise the Cardinal in the management of the Common Investment Partnership.  College of Consultors – a group consisting of Auxiliary Bishops and Pastors who review and approve major real estate transactions.  Archdiocesan Building Commission – a group of Pastors and Clergy who advise the Chancellor regarding plans for new construction throughout the Archdiocese.

Over this past year I have been both impressed by and grateful for the many people who have participated in the efforts to strengthen the Archdiocese. I have been blessed with the support of our pastors, priests and laypersons. They have unselfishly given their advice, time, hard work, and prayers. I am indebted to them. Under the strong leadership of Cardinal Seán, with the help of our clergy, religious and laity, and through a devotion to our faith, the Archdiocese is poised for a long future ministering to God’s people with love, respect and dignity.

James P. McDonough Chancellor

Scot Landry's Letter FY06 Scot Landry's Letter from Annual Report Fiscal Year 2006

My Fellow Catholics,

Many of you have heard the great news that the 2006 Catholic Appeal raised $13.8 million, which represented an increase of 15% from 2005 and 55% since 2002. On behalf of all those who work for the Church and who are supported by contributions to the Catholic Appeal, I thank you for your participation, your generosity, and your trust.

While a great deal of progress has been made over the past four years, there is much more still to be done. Our hope and prayer is that more people will realize the tremendous positive impact that they can have in helping the many important programs and good works of the Church.

Outreach & Stewardship With that said, we must improve in the way we, as a Catholic community, encourage, teach and practice Christian stewardship. Jesus teaches us so much in the Gospels about stewardship, which means recognizing that our blessings and gifts ultimately come from our loving God, who trusts us to develop those gifts and share them for the good of his whole family. In following Christ’s example, we hope that more of our parishioners will see the many needs of the Church and come forward to share their time, talent and financial resources to build a stronger community of faith. In terms of financial stewardship, we have four hopes.

We hope that all Catholics will support their parish in a committed way, either via weekly envelopes or through regular electronic giving.

We hope that our efforts at transparency, outreach and stewardship will encourage parishioners that are currently giving minimally to their parish to be more generous.

We hope that after deciding to be stronger financial stewards of their parish communities, that all Catholics will look to the mission and needs of the broader Church and commit to supporting the Catholic Appeal annually and a few other causes that are dear to them.

We hope that Catholics will remember the Church in their wills.

Improved Coordination and Giving Options At an Archdiocesan level, we want to continue to improve the way we facilitate giving to the Church. We seek to better coordinate the frequency and type of support we ask of our parishioners.

We also will make it easier to give electronically. Some parishes have already adopted electronic payment programs, to the delight of parishioners and pastors. We want to encourage and make these options available to all parishioners and parishes. We face a number of challenges as we encourage greater financial support for all the Church’s works.

Within the Church, so many entities have large needs for fundraising and are building development organizations. Many of our parishes face a new economic situation of maintaining older building and employing laypeople, with much higher salaries than the Priests, Religious Sisters or Religious Brothers of decades past. A particular focus within our Archdiocese will be the 2010 Initiative to strengthen Catholic Schools. Gone are the days where modest tuition and small fundraisers could cover the costs of providing an affordable education at a Catholic school. Without strong coordination efforts, we risk too much competition for contributors among our entities and too many solicitations of our parishioners.

Outside the Church, we have many of the elite fundraising organizations in our country among our nearby universities, hospitals, museums and social service organizations. Since many of our parishioners support these institutions also, the large capital campaigns being planned for these local institutions can impact the support the Church receives, particularly at the leadership level of giving. While these organizations raise the bar for our efforts, they also provide plenty of insights from which we can learn and benefit.

The high cost of living, particularly for home purchases, rents, and higher tuition at every level of education, are placing a huge burden on younger working families that desire to save enough to meet these increasing costs. This impacts the amount they are willing to give responsibly to their parish family.

Responding to the Challenges Despite these challenges, we only need to look to the generosity of Catholics in our previous century for our inspiration. On far more limited means, Catholics came together to build an incredibly vibrant Catholic Church in our Archdiocese. What a remarkable testimony to their faith and love for God, the Church and each other. I am confident that our generation of Catholics is up to that same challenge. We look forward to embracing this challenge together as we look toward our Bicentennial year and to the type of Church we hope to leave our children and grandchildren.

We pray that in the months and years ahead, we can earn trust and continued support to help us to pass on the faith to future generations of Catholics.

Best regards, Scot Landry